Satnews Daily
February 24th, 2020

Forrester Reports: Going Head to Head — SES and Intelsat

Chris Forrester

Another suite of missives from Intelsat were issued to the FCC on February 21 explaining where Intelsat stood on the CBA and the FCC’s decision to apportion proceeds from the upcoming auction in an equal split between Intelsat and SES, and the latter firm has let their disappointment regarding Intelsat’s actions be known, as related by journalist Chris Forrester at the Advanced Television infosite.

In one FCC filing, Intelsat pulling no punches, and said, “Nonetheless, on February 20, SES Americom Inc. (“SES”) filed a startling and incorrect Ex Parte document with the Commission, in which it relied on a defunct voluntary agreement and confidential audit report to advocate for a greater allocation of incentive payments. This is unfounded, and the willful misuse of confidential information and deliberate mischaracterization of such report before a federal agency, is indefensible.
     "Given the FCC’s decision not to pursue a private market-based approach, and instead to structure the clearing of the C-band through mandates, incentives, and reimbursements directed at each satellite operator in its individual capacity, SES’s invocation of a private agreement that was predicated on a completely different structure is legally irrelevant and factually unsupported."

Intelsat says it wants “at least” 60 percent of the revenue share.

Another separate filing to the FCC complains that the spectrum it (and SES and Telesat) is surrendering for auction is admitted by the FCC to be worth tens of billions of dollars, “with some parties submitting estimates as high as $77 billion”.

The company also argues that the FCC is wrong to consider its authority to decide in favor of an FCC-organized auction, stating that the FCC’s own rules only permits it to “modify” existing licenses and not to make fundamental changes to its licenses. “Forcing licensees to involuntarily relinquish more than half of the spectrum covered by their licenses, as well as to take on billions of dollars in accompanying relocation costs under a transition plan that has a number of unpredictable moving parts and potential payment clawbacks, cannot be fairly characterized as a mere “modification” to the licenses at issue,” said Intelsat. “In short, as the hundreds of megahertz and billions of dollars at stake make clear, along with the massive new risks and obligations FSS providers would shoulder under the proposed transition plans, the changes to existing licenses proposed in the Draft Order are too extensive to be considered mere “modifications” that the Commission can require even if the affected licensees do consent.”

Intelsat accuses the FCC of being “capricious” and “arbitrary” and “irrational” in its decision-making.

The satellite operator says the firm continues to support the FCC’s overall goal, but the Draft Order now on the table “cannot advance the FCC’s objectives in its current form”.

The FCC is expected to issue its final Order on February 28.

Certainly the gloves are definitely off, as far as SES is concerned, with its former partner in the C-Band Alliance (CBA).

In a last-minute filing to the Federal Communications Commission (FCC), SES stated their disappointment by Intelsat’s last-minute attempt to renounce its commitments made to other CBA members and the Commission over the course of this proceeding, ‘in aid of a transparent and baseless attempt to capture a greater share of the proposed accelerated relocation payments.’  “In light of all that has been achieved to date, this sudden reversal in direction by Intelsat is indefensible.”

SES states that based on independent third-party studies “[the] undisputed facts conclusively show that Intelsat and SES deserve equal shares of any accelerated relocation payments.”

SES reminds the FCC of the structure and rationale behind the creation of the Alliance up to the issuing of the FCC’s draft proposals on February 7. “Since then, and in breach of its contractual commitments, Intelsat now seeks to deny the role of the CBA going forward.  It is ironic that, in the very filing in which it seeks to deny the ongoing relevance of the CBA, Intelsat relies on the CBA’s filings and plans as evidence of the timing and cost of clearing.”

SES says it rejects the assertion by Intelsat that ‘there will be no C-Band Alliance going forward,’ and stated the company believes there remains an important role for the CBA and that the CBA’s collaborative clearing plan is the most efficient path to clear the spectrum. “Intelsat has no right to unilaterally disband the CBA, and SES will hold Intelsat responsible under its commitments.  That said, SES is prepared to act on its own in the clearing process if necessary, while protecting its customers.”